Drafting exclusion clauses in French simplified joint-stock companies (SAS)

English summary — the full article was published in French as « Rédaction des clauses d’exclusion dans les sociétés par actions simplifiées ».

An exclusion clause in the articles of association allows a shareholder to be compelled to sell their shares upon the occurrence of a predefined event, either automatically or by decision of a corporate body.

Validity: Article L. 227-16 of the French Commercial Code expressly allows such clauses in SAS companies, and the Constitutional Council upheld it on 9 December 2022. Since the 2019 ‘Soilihi’ law, they may be adopted under the ordinary conditions for amending the articles rather than unanimously (Cass. com., 12 October 2022).

Enforcement: the shareholder concerned must be able to vote and to be heard; the clause may simply refer to ‘just cause’ (Cass. com., 9 November 2022); and the pricing method and valuation procedure should be set out precisely to limit litigation risk.

Read the full article in French →